Section 234C — Interest for Deferment of Advance Tax

Section 234C of the Income-tax Act, 1961, deals with the interest levied on taxpayers for the deferment of advance tax payments. This section applies when a taxpayer fails to pay the advance tax installments as per the prescribed schedule. The interest is calculated at 1% per month for a period of three months on the shortfall amount for each installment due on 15th June, 15th September, and 15th December, and for one month on the shortfall for the installment due on 15th March. This provision ensures timely payment of taxes, aiding in the government's cash flow management. The burden of proof lies with the taxpayer to demonstrate compliance with advance tax payment schedules. In practice, this section is significant as it encourages taxpayers to accurately estimate their tax liabilities and make timely payments, thereby avoiding additional interest costs.

Common Litigation Flashpoints

1. Dispute over calculation of interest amount
2. Incorrect estimation of advance tax liability
3. Disagreement on applicability of interest for specific quarters
4. Challenges in proving timely payment of advance tax

Judgments on Section 234C — Interest for Deferment of Advance Tax

• Kishinchand Chellaram vs The Commr. of Income-Tax Bombay City II, Bombay — SC,
  The burden of proof lies on the Revenue to show that the remittance was made by the assessee and constituted its undisclosed income.
• The Deputy Commissioner of Income Tax, LTU, Bangalore vs M/s. Biocon Limited — ITAT,
  The provisions of Section 10B are exemption provisions, and profits of the eligible unit should not be set off against losses of non-eligible units.
• Union of India & Anr. vs M/s. Ganpati Dealcom Pvt. Ltd. — SC,
  The 2016 Amendment Act cannot be applied retrospectively as it creates new offences and substantive changes, which cannot be applied to past transactions.
• Interglobe Technology Quotient Private Limited vs ACIT — ITAT, 2024
  CSR contributions can be eligible for deduction under section 80G if they meet the necessary conditions.
• Procter & Gamble Hygiene and Health Care Limited vs Assessment Unit, National Faceless Assessment Centre, Delhi — ITAT,
  Expenses incurred for ESOP and ISOP are allowable as revenue expenditure under section 37(1) as they are real, substantiated, and business-centric.